Managing your money – ten golden rules

  1. Know where you stand

Be aware of your financial position. How much do you have? If you owe money, how much do you owe? If you’re in trouble, acknowledge it. Acceptance of your situation doesn’t necessarily mean liking it, but it does put you in the right frame of mind to do something about it.

 2. Put some of your earnings aside

After the various government bodies, the bank, building society, supermarket, utility companies etc. and your family have taken their share, keep some for yourself. Open a special savings account. Deposit 10% of your income there. If you can’t afford 10%, save 5%, but specify a future date on which you will increase it, and stick to it.

Putting a proportion of your earnings aside in this way is the first step to accumulating wealth. Interest accumulates. If you place regular sums in an interest-earning account, before long a stream of wealth flows in your direction.

  1. Avoid borrowing

Borrowing has its place as long as it is for long-term purposes such as a house. Never rely on it to cover short-term consumption. I know a man who made this mistake. He borrowed £10,000 at a high rate of interest, secured on the family home. He told the finance company it was for ‘home improvements’, but spent half of it on a foreign holiday. Five years later, when he lost his job, he could no longer afford the repayments, and the family lost their home.

4. Control your outgoings

Make a list of necessary expenditures. Budget for the essentials – food, accommodation, heating and lighting, clothing, transport etc. Examine your list to see where savings can be made, and take the necessary steps. Then, if possible, allow a little for pleasure.

5. Pay off your debts

Include in your budget provision to pay off any debts. Start by destroying your credit cards. These pernicious pieces of plastic give the illusion that you’re not really spending, but of course you are, and at a very high rate of interest too.

Remember, money is a form of energy. If you’re in debt, you have been taking more energy from others than you have been giving. You will never have security and peace of mind until you’ve paid it back.

Making small, regular payments builds trust. Don’t hide from your creditors and don’t make false promises.


  1. Invest prudently

Make each £, € or $ work hard for you. Invest it where it will earn a good return within taking unnecessary risks. History shows that the best long-term investment you can make is in land and property, especially your own home.

  1. Protect your assets

For example, if you lend money, ask for security and make sure the borrower can repay. If investing in a business, be realistic. Stick to products and services you’re familiar with at first. Invest only where you can reasonably expect a fair return, where the principal is safe, and where you can recoup your investment if you need to. As you gain experience, you may be prepared to take greater risks, but do your homework thoroughly. Never gamble more than you can afford to lose, and research the risks before you invest. There are plenty of schemers and con artists around!

  1. Insure wisely

Insure your home and possessions against fire, flood, burglary and theft, etc. Prepare for your retirement by taking out a pension plan (which is, incidentally, a tax-efficient way to save). Make sure your family will be provided for in case anything happens to you.

Make a will: should anything happen to you, this will ensure that your wealth is passed on to your loved ones as quickly and efficiently as possible.

  1. Magnify your earning power

 Use the Eight Steps to Success to magnify your earning power. Identify your financial goals and implement changes. Acquire new knowledge, personal qualities, and marketable skills. Use the I-T-I-A Formula to assimilate your goals into your consciousness. Then take action and keep going. Nothing works if you don’t.

  1. Keep your own counsel

Your financial affairs are your business, and no-one else’s. Discuss them with no-one (other than properly appointed professional advisers and officials). No matter how well off you are, never boast. You never know who might be listening, and there are plenty of people willing to help you part with your money once they know you have some: witness the thousands of begging letters received by lottery winners, sports and rock stars and other wealthy people.

Observe these ten ‘rules’ and you can rest assured that you are making the most of your money, and your future prosperity will be assured.

©David Lawrence Preston, 18.6.2016

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